India’s second largest state has appealed to the country’s top court to quash a Goldman Sachs-backed solar project, highlighting the challenges faced by solar companies looking to expand in Asia’s third largest economy.
Madhya Pradesh’s attempts to scrap the agreement with ReNew Power over the 51 megawatts (MW) project, citing land acquisition delays, were thrown out by a state court.
But the central Indian state’s distribution company (discom) has now appealed to the country’s highest court, potentially setting up a prolonged legal battle.
The move comes after Madhya Pradesh cancelled three solar power purchase deals with Canada-based Sky Power Global, also due to issues related to land acquisitions. Sky Power challenged the cancellations in the state high court, but lost the case.
India is targeting a 30-fold increase in solar power generation capacity to 100 gigawatts (GW) by 2022. But the plan risks running into trouble as debt-laden states try to renegotiate deals.